Can I get finance to buy equipment or a vehicle for my business?
Quick answer: Yes, finance is available for business equipment and vehicles. Business.gov.au lists loans, hire purchase, chattel mortgages and leases as common ways to fund vehicles, equipment and tools. The main differences are who owns the asset during the term and how the arrangement is treated for tax. Whether a lender will say yes depends on that lender's own assessment, and tax treatment depends on your circumstances, so speak to a registered tax agent before you commit.
Key takeaways
Common structures are an equipment loan, a chattel mortgage, hire purchase and a lease. They differ mainly on ownership and tax treatment.
With a chattel mortgage, business.gov.au says the business owns the asset from the start. A lease is a way to use an asset rather than buy it.
The ATO says a hirer under a hire purchase agreement can claim depreciation on the goods if they are reasonably likely to acquire them. Interest may also be deductible.
The instant asset write-off has changed several times. Thresholds and dates change, so check the ATO page for the current year.
We didn't find an official list of what lenders ask for, so ask each lender what they need before you apply.
What finance options does a business have for equipment or a vehicle?
Business.gov.au lists several options for vehicles, equipment and tools: loans, hire purchase, chattel mortgages and supplier trade credit. It also says banks and similar institutions offer business loans, lines of credit, equipment leases and asset financing. Which one suits you depends on cash flow, tax position and what you want to happen to the asset at the end.
Business.gov.au describes a chattel mortgage as similar to a hire purchase agreement, except that the business owns the asset from the start. Its page on leasing or buying vehicles and equipment says leasing generally has a lower upfront cost and makes upgrades easier, but you may need to make payments for the full lease period even if you stop using the asset. Buying lets you sell the asset later.
How do chattel mortgages, hire purchase and leases compare?
The table shows the features that business.gov.au and the ATO describe. Contract terms vary by lender, so always read the actual agreement.
| | Chattel mortgage | Hire purchase | Lease | |---|---|---|---| | Who owns the asset during the term | Business.gov.au says the business owns it from the start | Business.gov.au says it is similar to a chattel mortgage, but ownership is different. The ATO treats the hirer as the holder of the goods if they are reasonably likely to acquire them | You use the asset rather than buy it. We didn't find official guidance on ownership options at the end of a lease, so check the contract | | Tax treatment as the ATO describes it | We didn't find a specific ATO page on chattel mortgages; ask a registered tax agent | The hirer may claim depreciation on the goods, and notional interest may be deductible, if the asset is used to produce assessable income | Business.gov.au says you may be able to claim leasing costs as a tax deduction if you use the equipment solely for business | | Main point to check | Security and repayment terms | What happens if you do not end up acquiring the goods (the ATO says it is treated as a sale back to the financier at market value) | Whether you must keep paying for the full lease period |
How does the ATO treat hire purchase and depreciation?
The ATO says that under a hire purchase agreement the hirer is treated as the holder of the goods, provided it is reasonably likely they will actually acquire them. The hirer can then claim a deduction for the decline in value of the asset to the extent it is used for a taxable purpose. The ATO says the payments are split into notional principal and notional interest, and the notional interest may be deductible to the extent the asset is used to produce assessable income. See the ATO's page on deductions for depreciating assets and capital expenses.
If the hirer does not end up acquiring the goods, the ATO says they are treated as sold back to the financier at market value, which can trigger a balancing adjustment. That is why you should speak to a registered tax agent about your own arrangement before you sign.
What about the instant asset write-off?
The ATO runs an instant asset write-off for eligible small businesses that lets them deduct the business-use portion of eligible assets costing under a set limit, rather than depreciating them over time. The limit and its dates have changed several times. Thresholds and dates change, so check the ATO's instant asset write-off page for the amount, eligibility and timing that apply to your purchase. We have deliberately not quoted a dollar figure here. Some older ATO pages describe earlier-year rules, so check the date on whatever page you read.
Whether you qualify, and how a financed asset is treated, depends on your business and the agreement. A registered tax agent can advise you on this.
What do lenders usually ask for?
We didn't find an official list of what lenders require for equipment or vehicle finance. Requirements differ between lenders and depend on the asset, the structure and your business. Ask each lender for their checklist up front. Business.gov.au does say that debt finance usually needs collateral and involves repayments with interest, and the ATO and business.gov.au pages above explain the asset's role as security in some structures.
Do consumer credit rules apply to business finance?
ASIC's guidance says a loan to an individual that is predominantly for a business purpose is generally not subject to responsible lending obligations under the National Credit Act, and that loans to companies are generally not regulated either. ASIC says "predominant" means more than half, and that a lender's declaration alone may not be enough. Other protections, such as the misleading and deceptive conduct provisions of the ASIC Act, can still apply. See ASIC's FAQs on whether the credit legislation applies. If you are unsure how your loan is classified, ask the lender or take advice.
How Marl Finance can help
Marl Finance Pty Ltd, trading as Marl, is a Melbourne-based finance broker and a credit representative of Australian Finance Group Ltd (AFG). Marl can provide credit assistance to businesses looking at equipment and vehicle finance, with service in English and Chinese. Before we provide credit assistance, you can read our Credit Guide. Business.gov.au says some brokers charge fees while others are free to the customer but receive a commission from the lender, so ask any broker how they are paid.
Speak to Marl: email info@marl.com.au or call 03 8849 0131, 9:30am to 5:30pm, Monday to Friday.
Frequently asked questions
Can a new business get equipment or vehicle finance? We didn't find official guidance on this. Lender requirements vary, so ask each lender what they need.
What is the difference between a chattel mortgage and hire purchase? Business.gov.au says a chattel mortgage is similar to hire purchase, but the business owns the asset from the start. For hire purchase, the ATO treats the hirer as the holder of the goods if they are reasonably likely to acquire them.
Can I claim depreciation on a financed vehicle or equipment? The ATO says a hirer under hire purchase can claim a deduction for the decline in value to the extent the asset is used for a taxable purpose. Your own position depends on your circumstances, so speak to a registered tax agent.
Is the instant asset write-off available this year? It has changed several times. Check the ATO's instant asset write-off page for the current limit, dates and eligibility.
Is it better to lease or buy? Business.gov.au says leasing generally has a lower upfront cost and makes upgrades easier, while buying lets you sell the asset later and gives more freedom to modify equipment. The right choice depends on your circumstances.
Are business loans covered by responsible lending rules? ASIC's guidance says loans predominantly for business purposes are generally outside those rules, but other protections can still apply.
Sources
This article is general information only. It is general in nature and does not take into account your objectives, financial situation or needs. It is not tax advice; speak to a registered tax agent about your situation. Marl Finance Pty Ltd ABN 18 616 948 540 (trading as Marl), credit representative 000496273 of Australian Finance Group Ltd ACL 389087. Read our Credit Guide before we provide any credit assistance. Last updated 4 November 2026.
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